"Chavez’s march down the road to serfdom squandered the greatest oil rally in history," he writes.

It all goes back to 2002, when a national strike led by the PdVSA — the country's state oil company, which had been an anti-Chavez entity — caused production to drop from just below 3.0 MMb/d to just above 0.6 MMb/d.

In response, "Chavez purged PdVSA of talent and replaced it with political allies," Schork writes.

Meanwhile, oil prices were on their way up, eventually climbing 1,210%, to $131/b in 2008.

But during the same period, monthly Venezuelan crude oil production declined on average by 0.19% per month.

Eventually production did recover somewhat, to 2.0 MMb/d.

Too late, Schork says:

The Venezuelan government has spent the last thirteen years butchering its oil cow. In the process, the ideologues in Caracas have ceded an even more valuable commodity, intellectual capital, in return… a commodity that will continue to pay dividends long after Venezuela’s oil has run dry.